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Strong reports from Facebook and GM send US stocks climbing

Global stocks are surging following strong results from big companies in the U.S. and Europe including Facebook, General Motors and Airbus

Reported by: AP [ Published on: October 31, 2018 20:00 IST ]
Image Source : AP Strong reports from Facebook and GM send US stocks climbing

NEW YORK (AP) — Stocks are climbing again Wednesday morning as investors applaud quarterly results from companies including Facebook, General Motors and Estee Lauder.

After a rally a day earlier, the S&P 500 index is now on track for its first two-day winning streak since late September. The index is still down 6.6 percent in October and is headed for its worst monthly loss since September 2011.

Markets also rose in Europe and Asia.

KEEPING SCORE: The S&P 500 index rose 36 points, or 1.4 percent, to 2,719 as of 10 a.m. Eastern time. The Dow Jones Industrial Average gained 294 points, or 1.2 percent, to 25,169. The Nasdaq composite jumped 154 points, or 2.2 percent, to 7,316. The Russell 2000 index of smaller companies picked up 15 points, or 1 percent, to 1,522.

FACEBOOK FACE LIFT: Facebook announced a bigger third-quarter profit than analysts expected, although its sales fell short of their estimates. Its monthly user totals were also lower than expected, but users have increased compared to a year ago. The results appeared to be good enough to satisfy investors, and the stock rose 5.8 percent to $154.72.

Facebook has been pummeled over the last three months, and is down 29 percent since reaching a record high in late July. In that same month Facebook reported weaker-than-expected user growth and said it's spending more on security, moderation and product development.

Investors worry that companies like Facebook will be subject to more regulation following several data privacy scandals as well as online election meddling from outside the U.S. Facebook is also facing harsh criticism that its platform is being used to inflame ethnic and religious conflict in Myanmar. On top of all that, high-tech stocks like Facebook have stumbled this month as investors looked for safer, steadier options.

Other internet and technology companies also rallied. Apple gained 1.8 percent to $217.08 and Netflix jumped 7 percent to $305.76. Amazon soared 3.9 percent to $1,590.

PUT IT IN DRIVE: General Motors did far better than expected in the third quarter as it raised prices in North America and its China division held up well. While auto sales in the U.S. are slowing and trade tensions between the U.S. and China threaten vehicle sales there, GM's profit and revenue surpassed Wall Street forecasts.

The stock jumped 7.2 percent to $35.96. It's fallen 12.3 percent this year.

JOB SURVEY: U.S. companies added 227,000 jobs in October, according to a survey of private companies by ADP. That healthy gain suggests companies are still finding workers to hire even as the unemployment rate has fallen to a 49-year low. ADP, a payroll processing company, said employers added jobs in manufacturing, retail, and professional services such as engineering. The government will report its own jobs figures Friday. Analysts think that report, which covers both private companies and governments, will show a gain of 190,000 jobs.

Bond prices dropped. The yield on the 10-year Treasury note rose to 3.14 percent from 3.11 percent.

OVERSEAS: Shares of aircraft maker Airbus climbed 4.8 percent after it reported a rise in profits and cosmetics maker L'Oreal's stock rallied 7.1 percent on upbeat results. The French CAC 40 surged 2.3 percent and Germany's DAX gained 1.5 percent. Britain's FTSE 100 added 1.6 percent.

Japan's Nikkei 225 index jumped 2.2 percent and Hong Kong's Hang Seng rose 1.6 percent. The Kospi in South Korea gained 0.7 percent.

OCTOBER SCARE: Stocks have plunged this month as Wall Street was frightened by numerous potential problems including rising interest rates and the U.S.-China trade dispute. Both could impair economic growth and company profits. Investors are that much more nervous because corporate profits are likely to fall off in 2019 after strong growth this year, a big portion of which stemmed from the one-time corporate tax cut.

Some of the market's favorite stocks over the past decade have taken enormous losses. Amazon's stock has fallen more than 20 percent in October, wiping out around $200 billion in market value. Microsoft and Google's parent company Alphabet both dropped as well, while Apple only fell about as much as the rest of the market.

ENERGY: Benchmark U.S. crude slipped 0.5 percent to $65.87 per barrel in New York. Brent crude, used to price international oils, lost 0.5 percent to $75.55 per barrel in London.

Energy companies have lagged the market as U.S. crude has fallen 10 percent this month.

CURRENCIES: The dollar rose to 113.36 yen from 112.96 yen. The euro fell to $1.1320 from $1.1342.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP

Disclaimer: This is unedited, unformatted feed from the Associated Press (AP) wire.

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